Companies With Newly Flush Pensions See Chance to Unload the Risk
Some firms with highly funded pension plans are transferring retiree obligations to insurers
U.S. corporate pensions are at the highest funded level since the financial crisis, which could lead more companies to turn over to insurers the responsibility for paying retirees, pension consultants say.
Higher funding levels mean corporate sponsors get a better deal when transferring retiree obligations to insurers, so many firms are finding this to be the perfect time to transfer the risks associated with carrying pension plans.
Defined-benefit pension plans of S&P 500 companies were in aggregate 91% funded at the end of September, according to research released Monday by Goldman Sachs Asset Management. That is the highest level since the end of 2007, when these plans were 108% funded, according to the report. Nearly one-quarter of the plans are now either fully funded or overfunded, the report said.
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